At my last startup, we made a security game for website owners. We gave the product to site owners for free, and made money by selling ad space within the game. This meant we marketed to two completely different groups of people, with two completely different needs: web publishers, who wanted to improve their site’s security or user experience, and advertisers, who wanted to promote their products or brands.
So, who were our customers? The advertisers are the ones who paid us, so maybe they were our customers… but without enough site owners using our product, we’d have no ad space to sell.
Startups—especially ad-supported and marketplace companies—face this problem all the time (The phrase “If you’re not paying for it, you’re the product” encapsulates this dilemma nicely.). Are Facebook’s customers the people who browse the site, or the advertisers who pay to sell to them? Are 99designs’ customers the people who buy design work through the site, or the designers who provide it? Most startups, at least the successful ones, ultimately find some balance between the two.
Like all property management companies, we face a more extreme version of this problem. Our main customers are the rental owners who pay us, but there’s another group—tenants—who we deal with almost as frequently. And in a sense, our “product” is the entire experience of living in their home.
But most property management companies fail to strike a good balance between the needs of these two groups. To many, tenants are a nuisance to be dealt with as quickly and dismissively as possible, and owners—the ones with the money—are the only ones worth listening to. (And even owners are often treated terribly. There’s a reason almost everyone who’s ever used a property management company has a horror story about it.).
Why is this the case? A comprehensive answer would touch on a huge variety of influences, from unintentional sloppiness to the class struggle between laborers and the landed. But ultimately there are just two main factors that account for this dynamic: high switching costs and the force of the law.
A business has high switching costs when it’s difficult for users to leave. If your grocery store is selling rotten food, it’s pretty easy for you to find a new one. But if the company that manages your house is treating you like crap, there’s not much you can do besides move (and even then, you’re probably locked into a long-term lease).
Meanwhile, the force of the law means that management companies don’t really have to incentivize their tenants to behave well. Uber drivers can stop driving for Uber for any reason, so it’s in Uber’s best interest to treat them fairly. But if tenants stop paying their rent, they’re breaking a legally binding contract. Too many management companies rely solely on tenants being forced to pay rent, and don’t spend any time thinking about how they can make tenants want to.
At Castle, our philosophy is simple. The customer experience should extend to anyone who comes in contact with us, whether they’re an owner, tenant, contractor, or even a sales lead we lose to a different company. They may not be the ones who are paying us, but the tenants are our customers. Keeping them happy is good for everyone.